American Oil and Gas Reporter - December 2015 - 95

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ConventionCoverage: Pennsylvania Independent Oil & Gas Association
about the Appalachian Basin's future:
* Mergers and acquisitions will continue
as producers adjust to product pricing.
* The differences in estimated ultimate
recoveries over relatively small geographic
areas reflect a variety of geologies, and
drilling, completion and production methods.
* With additional well development,
data and analysis, the EUR potential of
Marcellus and Utica shales is likely to
change.

Tim Knobloch of James Knobloch Petroleum Consultants Inc. updates PIOGA
on merger and acquisition activity across
the Marcellus and Utica plays. Of the almost $50 billion in Appalachian Basin
oil and gas deals, Knobloch said more
than $33 billion of those deals had been
in the Marcellus play.

most active company in Ohio with 471
wells;
* Range Resources was biggest in
Pennsylvania with 842 wells; and
* Antero led in West Virginia with
191 wells.
Looking at the data by state, the two
said Ohio had 905 shale wells, Pennsylvania had 5,987, and West Virginia had
1,067.
Knobloch said 16 operators accounted
for 80 percent of all wells drilled in the
region, while seven operators accounted
for half. By another measure, 20 counties
accounted for 80 percent of the region's
unconventional activity, and eight accounted for half.
According to Shumway, the three
states have produced a cumulative 16
trillion cubic feet of natural gas since
2007, and have an estimated 56 Tcf of
recoverable reserves. Additionally, the
region also has produced a cumulative
50 million barrels of oil over the last
eight years, and has an estimated ultimate
recovery of 211 million barrels.
Shumway indicated the highest-value
Marcellus wells to date had been drilled
in eastern Ohio, western and northeastern
Pennsylvania, and southern New York.
The highest value Utica wells to date
have been in eastern and southeastern
Ohio, he confirmed.
Knobloch and Shumway concluded
with several observations and predictions

Energy Market Turmoil
Bernard Weinstein, economist and associate director of Southern Methodist
University's Maguire Energy Institute,
discussed the geopolitical ramifications
of growing U.S. production.
Weinstein observed that U.S. oil production in 2014 was approximately 9
million barrels a day, which was equal to
its 1985 level.
"We can attribute much of the U.S.
shale revolution to improvements in technology and efficiency," he remarked.
"Today, 60 percent of U.S. oil comes
from shale, compared with 16 percent
from offshore, 14 percent from conventional wells, and 11 percent from stripper
wells.
"There is no doubt the Great Recession
would have been worse and lasted longer
without the shale revolution," Weinstein
continued. "Conversely, I think we will
see the oil and gas sector's contractions
reflected in our third and fourth quarters'
gross domestic product."

Weinstein compared the world's top
oil producers in 1985 to those in 2014.
The notable differences, he said, are that
the United States has jumped from second
to first, with natural gas liquids included,
over the former Soviet Union (now Russia), and Canada, which formerly was
eighth, now is fourth.
"Almost all oil production growth in
the last five years has been in the United
States and Canada," he reflected. "Because
of that, the Saudis and Russians are trying
desperately to hold onto their market
shares long term."
On a more local scale, Weinstein said
the Marcellus' long-term outlook was
positive because it was a gas play. "Natural
gas is where it is at," he intoned. "The
Obama administration, and companies
and citizens the world over, have seen
the long-term benefits of gas-based fuels
and generation, from both economic and
environmental standpoints."
He said LNG exports could be a viable
option for Appalachian producers, as
there is an export facility in Maryland
set to come on line within a few years.
Weinstein had five suggestions for
PIOGA members to boost demand for
Marcellus gas:
* Expediting the permitting of LNG
export terminals;
* Substituting natural gas for coal
and fuel oil in power generation;
* Building more take-away capacity;
* Investing in the infrastructure to
support compressed natural gas and LNG
for over the road trucks; and
* Stressing the environmental benefits
of gas over other fossil fuels.
"Not all fossil fuels are created equal,"
Weinstein commented. "But the United
State has all of them in great abundance.
Now that we have realized that, we have
become an energy superpower."
❒

Coming In January

Martin Shumway of Shumway Resources
LLC points out the highest-value Marcellus wells. Shumway reported that
Ohio, Pennsylvania and West Virginia
had produced a cumulative 16 trillion
cubic feet of natural gas and 50 million
barrels of oil since 2007.

The Tech Trends reports open
with high-level technological insights from the top executive of one
of America's largest and most innovative independents. Guest authors
also explore cutting-edge developments in HPC, pattern recognition,
big data analytics, nanotechnology,
reservoir characterization, geophysical modeling, extended-reach drilling
and completion optimization.
DECEMBER 2015 95
American Oil and Gas Reporter - December 2015

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